Abstract
Modern economies are increasingly facing a population ageing, the massive retirement of post WorldWar II generations and resulting financial distress of their Pay-As-You-Go pension schemes. These challengesraise the need to rely more on pension saving either on an occupational or an individual basis.In this study, we conduct several theoretical and empirical investigations on pension plans as a contractualsaving vehicle for retirement, and follow two main directions. On the one hand, we shed light on theimportance of pension plans in the French and American retirement systems, demonstrate the role ofpension plans in the firms’ management of human resources and the use of pension plans in households’wealth accumulation strategies. This first part of our studies offers microeconomic insights in theusefulness of pension plans in retirement planning. However, the expansion of pension plans raises newchallenges in terms of retirement income security. Among risks that may result in income shortfalls forretirees, underfunding (whenever a certain level of income is guaranteed to retirees) and sponsoring ormanagement firms’ bankruptcy are the most important one. In spite of the creation of public entities thatprovide income insurance, plan participants incur a substantial amount of losses in the event of underfundingand bankruptcy. The second part of our contributions offers ways to secure pension benefits with priority rules.